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Is it finally time to get passionate about Colombia COLOMBIA'S by wuyunyi


									                                                                                                                                                         Monday, May 21, 2007

                              COLOMBIA’S NEW CONFIDENCE




                              CUMBIA: A Cartagena woman performing the “Cumbia”, a folk dance native to Colombia.                                                            Photo: Jay Scott

      in Figures              Is it finally time to get passionate
                              about Colombia?
                                Bad reputations                    This mismatch between        known) come to a chicken        diverse and often stunningly       near 800 in 2005, with the
                              are easy to come by,            perception and reality was        is when it is served up on      beautiful country populated by     trend expected to continue
                              but they can be much            borne out in the recent           a plate in one of the city’s    well-educated, hardworking,        downward.
                              harder to shake off –           Hollywood movie, Mr. and          excellent restaurants.          often well-traveled and open-          Gun crime has fallen
                              even when the reality           Mrs. Smith, in which Brad              Just how Colombia can      minded citizens, whose other       so dramatically that Bogotá
                              has moved on.                   Pitt and Angelina Jolie meet      move on from that old,          qualities might be described       now has a lower homicide
                                                              in a shabby hotel lobby,          negative stereotype is a        as ‘entrepreneurial’, ‘fun-        rate than Washington DC.
                                   That is certainly the      sweat beading their brows,        challenge being faced by        loving’      and,  above    all,   Elsewhere in the country,
                              case with Colombia.             and     chickens      scurrying   Luis Guillermo Plata. He is     ‘resilient’.                       security for road travel has
                                   If you looked at just      around the streets outside.       president of the country’s           These are the qualities       drastically improved, with a
                              about any opinion poll on       The subtitle reads “Bogotá,       investment promotion agency     valued by the ‘New Co-             greater police and military
   CAPITAL:                   Colombia, it would probably     Colombia.”                        Proexport, which is investing   lombia’ which have, in             presence enabling night
Bogotá                        yield the same depressing            When the film was first      heavily in a worldwide          Proexport’s campaign, been         travel on many highways.
   LOCATION:                  pattern of negative asso-       released in Colombia, most        campaign called Colombia        distilled down to a single             Most of these im-
Northern South America        ciations.   Drugs, cartels,     viewers didn’t know whether       es     Pasión,  the    heart-   word, ‘Pasión’, to encompass       provements have occurred
                              guerrillas,   paramilitaries,   to laugh or cry. For one thing,   shaped logo of which now        Colombians’ passion for            within the last four years,
                              gun crime, kidnappings ...      why all that studio-induced       adorns billboards, company      life, for doing business, for      since President Alvaro Uribe
1,138,910 (sq km)
                              And while nobody would          sweat? The audience knew          letterheads, clothing labels,   achieving excellence in their      launched his campaign to
493,733 (sq mi)
                              suggest that these problems     that, standing 2,600 meters       bags of coffee, trade shows,    chosen field.                      build “Democratic Security”
   POPULATION:                never existed in Colombia       above sea level, Bogotá is        and even the tails of Avianca        That      may   be   how      across the country. By this
43,593,035                    – nor, indeed, that the         higher than most ski resorts      airplanes.                      modern Colombians see              he means “not security
   LANGUAGE:                  country’s   struggle    with    and its weather generally              What this seeks to         themselves. But how do             alone, but to restore the
Spanish                       them is over – they belong      mild-to-brisk. Moreover, it       project abroad is nothing       you      convince     skeptical    freedom that we had lost
                              to the past. Nowadays           is a modern city, sophistica-     more      than   what     the   outsiders? Well, some of           because of terrorism.”
                              most Colombians talk of         ted and fashion-conscious,        majority of Colombians see      the key facts are as follows.
Colombian Peso (COP)
                              them in terms of history,       the closest most ‘Rolos’          as the reality surrounding      Kidnappings dropped from           *TURN TO COLOMBIA,
   INDUSTRIES:                ‘the bad times’.                (as Bogotá’s residents are        them – a geographically         2,882 incidents in 2002 to         PAGE 2
Textiles, food processing,
oil, clothing and footwear,
beverages, chemicals,         BUSINESS

                              FTA opens the way for
cement, gold, coal, and
  GDP purchasing
power parity:
$366.7 billion (2006 est.)
                              more business between
   GDP real growth
                              Colombia and the US
5.4% (2006 est.)                With its central
  GDP per capita              location and many
(PPP):                        ports, Colombia is
$8,400 (2006 est.)            the perfect business
                              conduit for the North
   EXPORTS:                   and the South.
$24.86 billion f.o.b.
(2006 est.)                       Colombia’s     strategic
   EXPORT PARTNERS:           geographic position at the
United States, Venezuela,     juncture of the Central
Ecuador                       American isthmus and the
                              great landmass of South
                              America, with important
Source: CIA World Factbook                                                                                 CARTAGENA: The Colombian flag flies over the historic               Photo: Proexport
                              seaports on both Pacific
                              and Caribbean coastlines,                                                    port town of Cartagena.

                                                                                                           Upgrading the ports
                              makes it ideally situated
                              to facilitate between North
                              and South. Understandably,
Editorial Director:           it is often described as
Jay Scott                     the ‘Gateway to South                                                          The Colombian government is                rather than providing international
Production:                   America’.                                                                    seeking a rapid expansion and                transhipment or logistics services.
Tannaz Etebarian
                                  Now, with the coming of                                                  upgrade of existing port facilities.         Competition within the region is
                              the Free Trade Agreement                                                                                                  fierce, with neighboring Panama
                                                                                                               Colombia’s main seaports cover a
Design:                       (FTA) between Colombia                                                       broad range of trade facilities, though
                                                                                                                                                        having an enormous advantage in its
Miche Ratto                   and the United States,                                                                                                    canal and associated infrastructure.
                                                                                                           for the time being these are mainly
                                                              BOGOTÁ: The Downtown       Photo: Tannaz
                                                              of Colombia’s capital.         Etebarian     focused on servicing the country’s         *TURN TO FTA, PAGE 3                                                         import and export requirements               *TURN TO PORTS, PAGE 6
    Page 2

                                                                                                                                     part of his Democratic           on from thinking merely
                                                                                                                                     Security. “Our objective in      about survival to building
                                                                                                                                     the social area,” he says, “is   for themselves a better
                                                                                                                                     to reduce levels of poverty      life within a secure and
                                                                                                                                     to 35 per cent during my         democratic environment.
                                                                                                                                     second term – down from               When      asked    about
                                                                                                                                     51 per cent last year, and       Colombia’s ‘image problem’,
                                                                                                                                     nearly 60 per cent four          President Uribe replied:
                                                                                                                                     years ago. And by the time       “I don’t agree with the
                                                                                                                                     Colombia celebrates the          idea of creating an image
                                                                                                                                     200th anniversary of its         different from the reality.
                                                                                                                                     independence in 2019, we         What we want to create in
                                                                                                                                     want to bring it down to 15      Colombia is a country with
                                                                                                                                     per cent.”                       real merits which will build
                                                                                                                                         Behind this lies the         confidence.
                                                                                                                                     thinking    that   only    by         “So      if     someone
                                                                                                                                     achieving economic and           from     the     international
                                                                                                                                     social improvements can          community asks you about
                                                                                                                                     security gains be made           the security situation in
                                                                                                                                     to last. For while Presi-        Colombia, please give this
                                                                                                                                     dent Uribe’s Democratic          answer:      ‘Yes, Colombia
                                                                                                                                     Security incorporates Plan       has some problems with
                                                                                                                                     Colombia, the US-backed          security and illicit drugs;
                                                                                                                                     war on drug-trafficking, it      but Colombia is improving,
                                                                                                                                     recognizes this is only a        has    the     determination,
                                                                                                                                     part of the solution.            and is on the right path to
                                                                                                                                         President     Uribe     is   overcome them.’
                                                                                                                                     therefore careful to connect          “The    best    way    to
                                                                                                                                     successes      in    security    improve Colombia’s image,”
                                                                                                                                     and the war on drugs to          he argues, “is not by hiding
                                                                                                                                     improvements in the lives        our problems. Instead, it
                                                                                                                                     of ordinary Colombians.          is by transmitting to the
                                                                                                                                     He has declared 2007 the         international      community
HARMONY: Modern and historic buildings stand side by side in Bogotá’s financial district.                  Photo: Tannaz Etebarian   “Year of Life,” to show how      our determination to fight
                                                                                                                                     Colombians have moved            these problems.”
*COLOMBIA, FROM FRONT            in a stranglehold. How was         first Colombian president        incentives to encourage
PAGE                             a new government going             to be re-elected in over a       capital investment. Having
                                 to change that?                    century.                         already    achieved    GDP
    The goal is to build              But President Uribe’s              He is aware that there      growth above 5 per cent,
political and social stability   team      was    willing  to       is still much to do. The         President Uribe says, “We
that is sustainable over         learn lessons from past            security umbrella needs          need to stabilize at that
the long term, which,            failures, adopting instead         to be further strengthened       level and move forward to 6
President      Uribe    says,    a gradualist strategy of           and extended across the          per cent,” adding, “for this
must      include    “broader    loosening the fingers one-         country. “Determination,”        to happen requires more
goals such as reducing po-       by-one, bringing physical          he says, “is the best            investor confidence.”
verty, increasing economic       security and the possibility       way for my country at                That is finally begi-
growth to generate more          of participating in the            this moment, no matter           nning to happen. The
jobs, and above all creating     democratic process to one          what risk it involves.           ratings agency Standard
greater      confidence     in   city or region after another.      The more the internatio-         & Poor’s upgraded Colom-
Colombia.”                            So gradual was this           nal community sees our           bia’s economic prospects
    That may seem a tall         turnaround      that    many       determination to combat          from ‘stable’ to ‘positive’
order,     especially   since    outside of Colombia did            terrorism, the more it will      last year, while Moody’s
just five years ago establi-     not notice what was going          trust Colombia.”                 upgraded     its   currency
shing security nationwide        on. Within the country,                 Confidence of inter-        rating from ‘negative’ to
seemed       an    impossible    however, the success of            national     investors    is     ‘stable’.
task.                            President Uribe’s policy           also crucial for further             The     President     is
    For decades the drug-        of Democratic Security             economic growth, and the         convinced that, along with
traffickers, criminal cartels,   was widely recognized by           government has recently          greater    prosperity   and
and left-wing guerillas had      voters who returned him            pushed      through    legal     competitiveness, social de-
held much of the country         for a second term – the            reforms and introduced           velopment is a necessary

Empresa de
Energía de Bogotá
The Power to Make Things Happen
  Empresa de Energía de          in the future could be built       though this is a sector
Bogotá (EEB) is a leader         between countries in the           where we do not see a
in the energy sector in          region, such as Venezuela.         lot of opportunities for
                                      EEB is also expanding         growth.”
                                 its original core business             But            electricity
     With the acquisition of     of     electricity  transmi-       transmission forms are only
strategic stakeholdings and      ssion across neighboring           one part of EEB’s domestic
building interconnecting its     countries: it is currently         energy portfolio. Its other
network with neighboring         building an interconnection        key activities in Colombia’s
countries, it has also become    line, linking Colombia and         energy       industry     are
a leader in the region as a      Ecuador. Besides which, EEB        through its majority 51.5
whole.                           is already a major player in       per cent holding Emgesa
     EEB’s latest acquisition,   electricity transmission in        – the second largest
the Colombian gas com-           neighboring Peru, where it         electricity generator in
pany TGI, took place last        has a 40 per cent holding          the country – while it also
December. This has greatly       in Red de Energía del Perú         holds a further 51.5 per
extended EEB’s presence          (REP), the country’s largest       cent stake in CODENSA,
in gas transportation since      energy transport company           the largest electricity sales
TGI’s      3,600     kilometer   to which it added in early         and distribution company
pipeline network makes it                                           in Colombia serving nearly
Colombia’s leading natural                                          2.1 million customers in
gas transporting company,                                           and around Bogotá.
both in terms of volume and                                             Through its dynamic
length of network.                                                  acquisition strategy, EEB is
     The TGI deal comes                                             now one of Colombia’s most
on top of earlier moves                                             important companies in the
into the natural gas sector,                                        country, a leader in both
firstly a 25 per cent holding                                       electricity and natural gas,
in the distribution utility                                         with total assets nearing
Gas Natural and then, in                                            the US$4 billion mark. It
June 2005, the acquisition                                          can be seen as another
of a 72 per cent stake in                                           example of Colombian
Transcogas – the utility                                            businesses acquiring a
company which, through its                                          dominant position in the
own 128-kilometer network,                                          region, using their local
takes care of 100 per cent of                                       success to expand outside
natural gas transport for the                                       their borders and bring the
towns around Bogotá, and                                            benefits of their service to
75 per cent within the capital   EEB: General Manager,              new markets.
itself.                          Astrid Martínez.                       Its        shareholders
     “The TGI acquisition,”                                         have benefited from the
says EEB’s General Mana-         2006 a 40 per cent stake           company’s investment in
ger Astrid Martínez Ortiz,       in Transmantaro’s smaller          natural gas in terms of
“allowed     us   to    modify   network.                           value, yield, and liquidity.
the combined company’s               Within Colombia, EEB           “As      an     investment,”
capital structure, thereby       is a leader in electricity         says Martínez, “it is of
reducing the cost of capital     transmission     through     its   low financial risk and
and improving our financial      692-kilometer network of           high strategic value, for
structure.” Moreover, she        230-kilowatt power lines.          it   complements        EEB’s
is confident that “natural       As      Martínez      explains:    activities in the electricity
gas in Colombia has great        “Our     main     transmission     sector and provides a solid
possibilities, both through      activities    in     Colombia      base for expansion.”
the dynamic increase in          are the maintenance of
domestic consumption, and        existing power lines and the
through cross-border in-         construction of new ones.
terconnections such as the       We bid for all government
export/import pipelines that     contracts to build new lines,
                                                                                                                                                                                                Page 3

*FTA, FROM FRONT PAGE             are mainly right-of-center        “for example, in energy,           offered investors substantial       are forging ahead with new            other agro-business, could be
                                  and pro-business, that he         where more than 80 per             gains, especially in SMEs.          programs to make Colombia             readily transferred into export
volumes      of     internatio-   continues to express his          cent of our territory has not      And the many new techno-            a more competitive business           opportunities. Other sectors
nal trade are expected to         determination to crack down       been properly explored and         logy companies growing up           environment and, crucially, to        fitting this profile included
increase significantly. And       on    drug-trafficking    and     far greater resources are          in Bogotá and elsewhere             make it easier to invest there.       light manufacturing, medical
while the US is undoubtedly       improve    internal   security    needed in order to increase        are mobilizing the natural          “We have to support in a              equipment, electronics, and
the most important export         through his ongoing campaign      oil exploration.    Similarly,     aptitude and intelligence of a      more efficient way companies          service industries requiring
market for Colombian goods        for Democratic Security. But      further investment is needed       new generation of Colombians        that are here,” says María            high skills levels.
and services, the FTA is          for Colombians themselves,        in agriculture to develop bio-     to develop software or provide      Fernanda Campo Saavedra,                    The third conclusion was
only part of the expanding        possibly the greatest tangible    mass energy since Colombia         call centers and other add-on       of the Chamber of Commerce,           that there are dichotomies
network of international trade    benefit of enhanced security      offers excellent opportunities     technology-related services.        “in order for them to be more         in the perceptions investors
agreements that will give         and stability is the way in       to produce bio-fuels such as            Further investment in          competitive during this period        have of Bogotá depending
added impetus to an economy
                                                                                                                                                                                 on whether they are based
already growing at nearly 7
per cent a year.                       “Colombia’s fast-growing economy saw GDP                                                                                                  in the city or have never
                                                                                                                                                                                 visited. There are amazing
    President Alvaro Uribe’s
government      has    entered           increase by nearly 6 per cent last year.”                                                                                               success stories like IBM, who
                                                                                                                                                                                 centralized all its call-center
into a number of free trade
accords, most recently with       which it has fed through into     ethanol and bio-diesel.”           telecoms    infrastructure   is     of globalization.”                    operations for Latin America
Chile and Peru, to be followed    business confidence.                  Agriculture       Minister     still necessary. Noting that             Besides     which,    the        and sell thousands of dollars’
by agreements with three               Colombia’s fast-growing      Andrés Felipe Arias Leiva          Colombia has a low level            Chamber of Commerce and               worth of business across the
Central American countries,       economy saw GDP increase          argues, “With the FTA and          of     Internet     broadband       agencies such as Bogotá               region. Siemens engineering
namely Honduras, Salvador,        by nearly 6 per cent last year.   more open markets we must          penetration and a restricted        Región Dinámica are seeking           is at the same level in
and Guatemala. But, as            For 2007 the expectations         focus production on high-          range of telecoms products          to improve the capital city’s         Bogotá as its operations in
President Uribe points out:       are that it will continue         value export sectors.              and     services,     President     ‘platform’ of infrastructure          North America and Europe.
“We are also in conversations     growing past the 7 per cent           “We     are    going     to    Uribe points to the huge            and business services: “If we         Investors who are here like
with the European Union           mark. Moreover, this has          implement a program of             investment opportunities in         have a better connectivity,”          the place and are asking for
and with the four countries       been achieved against a           fresh resources for agriculture    these industries. Improved          says Saavedra, “better le-            more budget to increase their
of the Andean Community           background of falling price       worth US$200 million, or           communications, both elec-          vels of education, more               operations.
– Ecuador, Bolivia, Peru, and     inflation, down again last year   almost double the previous         tronic    and transportation,       innovation, more research,                  Inward investment pro-
Colombia.”                        to just 4.5 per cent.             budget, to support both            are recognized as central to        then we will become that              cedures have been greatly
    For    many     Colombian          International      ratings   those sectors that have to         Colombia’s ongoing economic         much more competitive. To             simplified. “Two years ago,”

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businessmen the FTA re-           agencies     have    upgraded     compete with imports from          development.                        achieve this we are both              says Saavedra, “we developed
presents far more than just       Colombian creditworthiness,       the US,” he says, “and to               For     precisely     which    supporting      companies     at      an important project to speed
a commercial opportunity.         and leading multinationals        enhance productivity and           reasons INVIAS, the go-             the micro level and seeking           up the process of creating
Rather, it is a show of           like Johnson & Johnson,           competitiveness       especially   vernment        agency      that    further improvements in the           a company in Colombia.
confidence in Colombia by         Colgate Palmolive and Pfizer      for those sectors that have        manages the country’s road          city’s platform.”                     Previously it required 17
the US, a clear recognition of    are investing and positioning     greatest export potential such     infrastructure, is upgrading             Dr. Virgilio Barco Isakson       different procedures involving
the strategic nature of their     themselves for further growth.    as fruit, flowers, beef, dairy,    major trade routes and              of Bogotá Región Dinámica             10 different entities, all of
bilateral relationship. And       Another indicator of the          tobacco, forestry, rubber and      offering attractive concessions     points to research on the             which took around 60 days.
given the increasing number       attractiveness of Colombia to     palm products, cocoa, and          to local and international          city’s – and, more generally,         Now we have simplified it to
of left-leaning countries in      investors was the acquisition     fisheries.”                        bidders. At the same time,          Colombia’s – comparative              just two steps, with everything
the region – and particularly     of the country’s main brewery,         Other      fast-expanding     seaports such as Cartagena          advantages.       “One     thing      done here at the Chamber
the strong anti-US stance         Bavaria, by the international     sectors       where        new     and Buenaventura are going          that really stood out,” he            with the DIAN (Agency of
adopted      by    Venezuelan     brewing giant SABMiller.          investment opportunities are       ahead with major expansion          says, “was the availability of        National Tax Recollection),
president Hugo Chávez – it             Indeed, the breadth of       arising include tourism, and       plans so as to handle greater       highly qualified labor that is        and it takes just two-and-a-
is likely that Washington will    investment opportunities, ran-    especially ‘health tourism’,       volumes of commercial and           very service-oriented, very           half days.
value Colombia’s friendship       ging from natural resources       as well as new real-estate         tourist traffic. At Bogotá’s        committed, and well-trained.               Many things are changing
and support even more in          to software programming, is       developments being built           international     airport,    El    The research also pointed             in Colombia and so fast that,
future.                           as exceptional as Colombia’s      mainly for the returning           Dorado, a huge expansion            toward a need to specialize           if potential investors want to
     In building this re-         varied landscapes.                Colombian diaspora. In recent      and upgrade of facilities is        in sectors where opportunities        get in on the ground floor,
lationship it certainly helps          “They exist in many          years, Colombia’s dynamic          under way.                          to serve local or regional            they should go and look for
that President Uribe’s policies   sectors,” says President Uribe,   financial     markets     have          Investor support agencies      markets, such as flowers and          themselves soon.

Dramatic Changes to
                                                                                                       previously did not exist            ces with specially-designed               “Who      would    have
                                                                                                       except among the elite.             life   insurance    products          thought,” he asks, “just
                                                                                                       Now the middle class has            going out to middle- and              15 years ago that we’d

the Financial Landscape
                                                                                                       begun to invest in capital          low-income strata,” says              be     selling   insurance
                                                                                                       markets.”                           Dr. Jorge Enrique de Jesús            to low-income families
                                                                                                           Another growth area             Uribe Montaño, President              in   Colombia?     But   as
                                                                                                       is    insurance.    Whereas         of Seguros Bolívar, the               income       per     capita
  Colombia’s investment           seek investment advice or         coming. We hope to move            previously the vast majority        best capitalized of the ‘Big          starts to increase, more
laws have generated a             portfolio management. But         from the 40 firms that             of Colombians did not               Five’    insurance    groups          people are able to buy
savings culture.                  many of these smaller, more       exist to less than 20, either      bother     with   insurance,        which control almost 50               insurance.”       However,
                                  specialized institutions were     through mergers between            either through lack of              per cent of Colombia’s fast-          reaching them, he points
     As in most other emer-       under-capitalized,     leaving    domestic players or the big        access or lack of knowledge         growing market. While it              out, requires investment
ging markets, Colombia’s          them vulnerable to any            international      investment      of the products available,          has strategic alliances with          in distribution channels,
financial institutions were hit   global downturn.                  banks like Merrill Lynch or        nowadays the big insurance          multinationals like AXA and           and    advertising:    “You
hard by the Asian financial            “Now we have moved           Morgan Stanley.”                   companies are reaching a            Zurich,    Seguros    Bolívar         have to go directly to the
crisis of the late 1990s,         more towards a system                  That is not to say            growing market through              believes being “100 per cent          client,” he says, “so in
and the period since 1999         of universal banks that           that specialist houses are         focused sales campaigns.            Colombian” gives it an edge           future the Internet could
has been characterized by         offer a complete range of         extinct. Colombia’s stock              “Now we have sales for-         in reaching new markets.              become a great tool.”
dramatic structural changes       services,” says Dr. Cecilia.      market has been growing
in the sector.                    “There has also been an           rapidly (in 2005 it was the
     Recent years have seen       influx of international banks,    second        fastest-growing
consolidation right across        with     CitiGroup,     BBVA,     national index in the world,
the sector, with smaller          Banco Santander, Lloyds,          after India’s), and the very
service     providers    being    Banistmo, and others either       dynamism of activities in
taken over by larger entities     buying into or expanding          both primary and secondary
– local players intent on         their presence in Colombia.”      markets means there are
gaining market share or                The result is a narrower     plenty of opportunities for
big multinationals seeking        pool of providers offering a      local players capable of
to build up their Latin           broader range of services.        competing with the biggest
American network while at         The concept of the one-           of international banks.
the same time gaining direct      stop-shop      is   now     an         One of the largest
access to Colombia’s growth       accepted model and banks          Colombian financial houses
potential.                        pride themselves on both          is Alianza Valores, with
     “The banking system          diversity and integration.        assets of around $US500
in Colombia has changed                Dr.    Cecilia   believes    million under administration.
enormously,”        says    Dr.   that this consolidation will      As well as providing the
Gloria Cecilia, President of      soon extend to capital            usual bond and foreign-
Alianza Valores. “Previously      markets. That process has         exchange       trading    and
the system was far more           already begun. Whereas            settlement services, Alianza
segmented, with specialized       previously there were three       Valores prides itself on its
financial vehicles offering       independent stock markets         intimate knowledge of the
limited ranges of services.       in Bogotá, Cali and Medellín,     country’s stock market and
We had mortgage banks,            these merged in 2001 to           its distribution capacity,
commercial       banks,    and    create in La Bolsa de Valores     having invested recently in
financial corporations fo-        de Colombia a single, unified     expanding its network to
cused on providing just one       securities market.                cover all the main centers
type of service.”                      “But we also need            of economic activity from
     So Colombians would          to    consolidate    on    the    Barranquilla to Medellín.
go to one institution to take     brokerage side,” says Dr.              “Changes in Colombia’s
out their mortgage, another       Cecilia, “because at present      investment laws have ge-
to manage their personal          there are many firms that         nerated a savings culture,”
finances, and yet another to      are too small for what is         says Dr. Cecilia, “which
    Page 4

Building Boom Signals
a Brighter Future
  Real-estate                     has a portfolio of major          incredibly well, and our
development and                   companies covering most           recognition that we have a
construction are                  areas of expertise.        The    social responsibility – to our
bouncing back in                  development         company       clients, to our investors, and
Colombia.                         AMARILO (known as In-             to the partners we use – to
                                  mobiliaria Mazuera prior          complete any project to the
     Increased demand for         to its re-branding in 2004)       highest architectural and
housing     combined      with    covers a broad range of           construction standards.”
greater     availability     of   housing needs: “We have                Moreover, these major
real-estate-linked       credit   a very successful project         players have enjoyed suc-
financing has resulted in         in Cali,” says AMARILO’s          cess because they have
the    construction     sector    president,     Dr.     Camilo     been amongst the first
growing by around 16              Congote Hernández, “which         to recognize a relatively
per cent last year. That          is medium-income housing.         new phenomenon – the
represents nearly three           But we are also involved in       growing flow of Colombians
times the country’s overall       low-income housing, and           living abroad who now
economic growth rate of           here we are talking about         wish to either return home
5.7 per cent.                     just US$40,000 per unit.          permanently or to invest
     This startling increase           “We are also planning        in a holiday home back in
demonstrates a growing            to expand in Barranquilla,        Colombia.
confidence amongst pro-           Santa Marta, and Cartagena,            “We send our co-
perty buyers and investors        where we are going to             mmercial       managers      to
– a direct result of the          construct housing to meet         property fairs in Miami
improvements in security.         demand arising from new           and Madrid,” says Arango,
     The ‘bad old days’           people – including Chinese        “where      we     pitch    our
when major real-estate            companies – coming in to          projects      specifically   to
developments were aban-           take advantage of the Free        Colombians living abroad.
doned and left unfinished         Trade Agreement (FTA)             But the interest is coming
are, it would seem, at an         with the United States.”          not just from the Colombian
end. And the results of                But the remarkable           diaspora these days. We
the subsequent boom are           shift in Colombia’s real-         already have agreements
there for all to see in the       estate     market       stems     with    Chilean      investors,          ARCHITECTURAL MARVEL: The intelligent                       Photo: Mei Schwein
rapidly changing silhouette       directly from the improved        we’ve had visits from                    building of the Public Companies of Medellín.
of Cartagena’s new town           perceptions of security.          Spanish      investors     and,
as new luxury apartment           “The biggest demonstration        more recently, increasing         is accelerating is also              cement     group,”   says    close to the customer
towers spring up into             of that change,” says             interest from the Arab            clearly reflected in the             its president, José Al-      allows for integrating the
the Caribbean sky.         But    Dr. Hernández, “is that           world.”                           rapid demand for building            berto Vélez, “and with       business from cement
it’s not just in fashiona-        now we are working on                  This is a good ba-           materials. Last year, 18             companies in Panama,         production to final sales.
ble     coastal    Cartagena      developments       in    Villa-   rometer of the changing           per cent of the country’s            Haiti and the Dominican      “Last year we exported
that     developments      are    vicencio, an area where           perception      the     outside   road cargo was cement                Republic.     We      also   2.5 million tons of cement
booming.       Across      the    people were being kid-            world has of Colombia. It is      produced by just one                 have a cement plant in       to the United States,
country, new homes are            napped eight years ago.”          increasingly seen as a place      provider    –    Cementos            Venezuela. Recently we       equivalent to 8 per cent
rapidly appearing as real-             What developers such         with    improving      security   Argos.                               established a presence       of all cement imports.”
estate developers focus on        as Ospinas are able to            conditions and its capi-              Cementos Argos be-               in the US market through         So,     while     Vélez
the most promising market         offer are standards of            tal appreciation is viewed        gan as a local operator              the acquisition of three     is happy to see the
segments, namely domes-           quality     and      desirable    with confidence. “Foreign         and is now not merely the            important       ready-mix    Colombian market grow-
tic second-home buyers            locations that appeal to          investors see greater growth      largest provider in the              companies in Texas, North    ing, he is particularly
and cash-rich Colombian           the middle-income market.         opportunities here than at        local Colombian cement               Carolina, and Georgia.       proud that Cemen-tos
diaspora home-comers.             “What sets us apart from          home. They are starting           industry but has expanded                “More than half of our   Argos has “taken the
     The real-estate industry     our    competitors,”      says    to believe in our country         to become a player on the            income now comes from        opportunities to inter-
has already been through          Ospinas’s president Andrés        again,” adds Arango.              international stage.                 the United States,” he       nationalize the company
a phase of consolidation,         Arango, “is our 75-year                The fact that Colom-             “We      have    joint           adds, noting that having     and become a truly global
and today the country             track record of doing things      bia’s construction industry       ventures with a Swiss                ready-mix      businesses    player.”


                                                                                                      Leaps Ahead
                                                                                                        This new, more fully               associated value-added           The new, more
                                                                                                      integrated company                   services, on top of          fully       integrated
                                                                                                      has been growing                     the company’s pro-           company has been
                                                                                                      profits since 2003.                  vision    of    general      growing         profits
                                                                                                                                           telecoms       services      since 2003, and is
                                                                                                           President          Alvaro       in 21 departmental           now    providing    TV
                                                                                                      Uribe’s       government             capitals     and    930      as well as telepho-
                                                                                                      is pushing ahead with                municipalities around        ny    services.    And
                                                                                                      a     profound          trans-       the country.                 it is working with
                                                                                                      formation           of       the        “We are going to          Telefónica’s    mobile
                                                                                                      telecoms sector. Old                 compete throughout           operation Movistar, to
                                                                                                      monopolies have been                 the    country,”   says      provide competition
                                                                                                      swept aside, opening                 Gómez, “and have             in the fast-growing
                                                                                                      the way to greater                   taken the decision to        mobile market.
                                                                                                      competition and, in                  enter the key market             Looking ahead to
                                                                                                      the process, creating                of Bogotá and other          the development of
                                                                                                      favorable conditions                 major cities such as         WiMAX      technology
                                                                                                      for foreign investment               Cali. We are inves-          and    VOIP,    Gómez
                                                                                                      in Colombia.                         ting in infrastructure       sees a bright future
                                                                                                           C o l o m b i a                 and constructing a           with    further   gro-
                                                                                                      Te l e c o m u n i c a c i o n e s   broadband      platform      wth and investment
                                                                                                      was       born       out       of    for more than 37             opportunities        in
                                                                                                      the wholesale res-                   municipalities.              Colombia.
                                                                                                      tructuring          of       the
                                                                                                      telecoms             industry
                                                                                                      and is now a leading
                                                                                                      provider         of        mul-
                                                                                                      tiple services. The
                                                                                                      company has entered
                                                                                                      into        a       strategic
                                                                                                      alliance with Spain’s
                                                                                                      Telefónica,         enabling
                                                                                                      a major recapitali-
                                                                                                      zation        opportunity
                                                                                                      with       new         invest-
                                                                                                      ment into Colombia
                                                                                                      Te l e c o m u n i c a c i o n e s
                                                                                                      estimated at US $670
                                                                                                      million between 2006
                                                                                                      and 2007.
                                                                                                           Alfonso          Gómez,
                                                                                                      President of Colombia
                                                                                                      is confident that this
                                                                                                      investment will be
                                                                                                      recouped         with        the
                                                                                                      increasing penetration
                                                                                                      of     broadband             and
                                                                                                                                                                                          Page 5

Tourists to Colombia Have Something to Smile About
  Some 30 Colombia-                and quality of medical              United States.                      growing     percentage    of      standards;       and     an    operations per capita in
based clinics were                 treatments now available                 “Medical      care     in      patients are coming from          opportunity     to   escape    the world. It was also the
represented at an                  in private clinics only             Colombia is approximately           abroad,     with   agencies       to pleasant countryside        birthplace of last year’s
event held late last               three hours’ flight away,           a quarter of what it costs          in the US and Europe              to recuperate. Patients        ‘Crossed Legs Strike’, a
year in Miami called               and also of the substantial         in the US,” says Eduardo            organizing surgery pack-          frequently choose to build     decision by the girlfriends
the ‘Expo Salud’.                  cost savings compared               Vargas Martínez, president          age trips to Colombia             a vacation around their        of gang members and
   This   event    raised          to having the        same           of    the    Medellín-based         where local hotels stress         transformation – returning     paramilitaries    to   deny
awareness of the breadth           procedures done in the              Clínica Las Américas. Last          their proximity to clinics        home without bruises or        sexual favors to their
                                                                       year, this private clinic           and    recovery-enhancing         dressings, and with a new      partners until they agreed
                                                                       alone treated more than             environments.                     lease of life or quality of    to give up their guns.
                                                                       480 foreign patients, 65                In order to realize the       health.                            How     effective   this
                                                                       per cent of whom came               potential in this sector,             Cosmetic surgery has       campaign will be in the
                                                                       from the US.                        prospective patients need         long been a specialism of      long term remains to be
                                                                            Many of these were             to be reassured as to             Colombian clinics. In fact,    seen. But in terms of
                                                                       Colombians or Latin Ame-            quality of services – highly      a small town in Colombia’s     promoting Peace rather
                                                                       ricans living in the US who         trained and experienced           coffee    region,   Pereira,   than Power, it certainly
                                                                       are ‘in the know’ about             doctors;     modern     and       holds the title of having      undermines Mao’s dictum
                                                                       some of the world-class             sophisticated clinics oper-       the highest percentage         of what comes out of the
                                                                       clinical procedures now             ating    to    international      of     cosmetic     surgery    barrel of a gun.
                                                                       available: “Many come
                                                                       for their annual medical
                                                                       check-up,” says Martínez,
                                                                       “corporate         check-ups,
                                                                       dentistry, or gynecology
                                                                       not     covered     by   their
                                                                            “And since the image
                                                                       of Colombia abroad has
                                                                       improved, more Americans
                                                                       are starting to come
                                                                       here.” Many come for
                                                                       oncology – for a second
                                                                       opinion or for oncology
                                                                       surgery as the Cancer
                                                                       Research Institute at Las
                                                                       Américas is the largest
                                                                       and most comprehensive
                                                                       in Medellín – or for
                                                                       general surgery. Other
                                                                       procedures      in    demand
                                                                       include elective cosmetic
                                                                       surgeries, transplants (the
                                                                       clinic is unique in doing
                                                                       larynx transplants), and
                                                                             The cost savings can
                                                                       be     substantial.    Breast
                                                                       implants in clinics around
                                                                       the US can cost in the
                                                                       region of $10,000, while
                                                                       the      same       operation
                                                                       goes for just $3,000 in
                                                                       Colombia’s      finest    sur-
ENCHANTING: Cartagena is a               Photo: Tannaz Etebarian       geries. Unsurprisingly, a
mix of magic and romance.

Quicker, Cheaper, Safer, Colombia is
Becoming a Better Place to do Business
  Few would dispute                Suarez Vallejo. “We also have
that an efficient and              alliances in Venezuela and
cost-effective transport           Ecuador for deliveries there,
system is essential                and a point of sale in Miami
for any country to be              where packages are received.
competitive in today’s             We plan to expand further in
increasingly globalized            the US market and are now
markets.                           targeting New York.”
                                        Vallejo sees the Free
       Yet, until very recently,   Trade Agreement (FTA) with
Colombian delivery services        the United States opening
and freight operators were         enormous opportunities. “We
unable to utilize even existing    have to become a more global
road infrastructure efficiently    company,” he says. “The
because most major highways        other challenge is integrating
were closed at night for           our logistics chain processes
security reasons.                  to provide complimentary
     Nowadays, that situation      services to our clients. So
has changed in many parts of       we are introducing a new
the country where the roads        messaging service and a
are kept open 24/7 thanks to       more      specialized     service
improved security and military     for documents and smaller
presence. “Between 2002 and        packages.”
2005, vehicle traffic increased         Further improvements in
by nearly 250 per cent,” says      transport efficiency depend
Minister of Transport Andrés       very     much     on    planned
Uriel Gallego Henao, “and we       investments in infrastructure.
expect the latest figures to       “Traffic volumes are expected
show even higher road usage        to grow in line with GDP,” says
with more than 170 million         Henao, “provided the security
vehicles      passing   through    situation remains stable.” So
tolls.”                            the government’s focus has
     It    is   impossible    to   now shifted to reducing traffic
underestimate the impact this      accidents and upgrading the
change has had on the ground       road network.
transport industry. Overnight           Considerable           new
delivery is once more an           funding is already being
affordable possibility. Larger     channeled into improving the
loads can be carried when          country’s road infrastructure.
road usage is low, there-          “The government recently            SAFER: Better security has                Photo: Tannaz Etebarian
by alleviating congestion.         approved 12 concessions on          drastically cut transportation costs.
Operating costs are reduced        two-lane highways,” says
by fewer losses and lower          Henao, “which are going             troubled national airline. “We      Miami and regional airports
insurance premiums.                through the bidding process.        have recuperated strongly           like Cali, Cartagena, and
     Leading delivery com-         And the national government         since leaving Chapter 11 in         Barranquilla.”
panies like Transportadora         is in talks with the big            December 2004,” says its                 Having bounced back
Comercial Colombia (TCC)           multilateral       development      president, Fabio Villegas,          from near-bankruptcy, Avi-
have used the opportunity          banks to raise US$1 billion of      “since when we have had a           anca now aims to leverage
to build a fleet of vehicles       credits for the improvement         20 per cent growth. We have         Colombia’s growing economic
and a portfolio of services,       of regional roads.” Another         expanded our fleet from 42          role to establish itself as a
comparable       to   the    US    government agency, INVIAS           to 52 planes, and are once          global leader. “Modernizing
service providers who have         (National       Institute      of   again operating routes to Los       our     fleet    will  provide
become global household            Roadways), is offering further      Angeles and Barcelona, which        substantial cost savings in
names. Indeed, they provide        concessions to attract outside      had been stopped, and we            fuel and maintenance,” says
international services aimed at    investment.                         are adding new regional and         Villegas, “and we are gain-
Colombians in the US wishing            The     expansion       and    intercontinental routes.            ing competitiveness through
to send packages home,             upgrade of the main in-                 “We are looking to further      improving        our    service
securely and promptly.             ternational airport, El Dorado,     growth of volumes to Europe         patterns.” If that momentum
     “We have an alliance          is to be completed over the         and especially to the United        is kept up, Avianca may
with DHL for our worldwide         next four years and will be         States following the FTA,” he       just fulfill its goal of being
delivery service,” says TCC’s      crucial to the revived fortunes     adds, “which is why we now          the “leading Latin American
General Manager, Gustavo           of Avianca, the previously          have direct flights between         airline by 2010.”
    Page 6

Old Charm
Wins New
  Cartagena ranks                 its previously shabby state
amongst the oldest                into the successful, world-
seaports in the                   class facility it is today.
Americas.                              The modern port of
                                  Cartagena has grown to
     Founded in 1533 by           become the country’s largest
Pedro de Heredia, ‘The            container terminal, operating
Pearl of the Indies’ quickly      to the highest international
became one of the busiest         standards. It is also highly
ports in the Caribbean. As        profitable.     And      Captain
the departure point for the       Salas has set his sights on
gold and silver the Spanish       Cartagena becoming “the
had plundered from the rest       number one port in the
of the continent, the city        Caribbean      area,     offering
repeatedly suffered from          competitive advantages in
pirate attacks – against which    both cost terms and levels of
the Spaniards constructed a       cargo service.”                     HISTORIC CHARM: Cartagena has become one of the Caribbean’s top cruise destinations.                           Photo: Port of Cartagena
ring of defensive forts and            The key to achieving this,
walls around the town and         he says, is “connectivity”
harbor. These survive to          – ensuring that all the             new refineries and factories.”   are that the coming years                “The     main    reason        Cartagena       and    other
this day, along with many         elements necessary for a                 Volumes of container        will provide even better             that they stayed away,”            destinations they usually
beautiful colonial churches,      major transportation hub            traffic through the port are     opportunities.”                      says      Captain     Salas,       visit in the Caribbean.
palaces, and town houses,         to work smoothly are in             likely to be boosted further           While container shipments      “was a bad perception of           Because we are not just
making Cartagena a cul-           place and mesh together.            by the Free Trade Agreement      and cargo provide the bulk           the city, especially the           beaches       and    shopp-
tural tourism destination         “This is not just my input,”        (FTA) between Colombia and       of Puerto de Cartagena’s             personal security of their         ing areas, we are more
without comparison in the         he insists, “but stems from         the United States. Besides       revenues, Captain Salas is           passengers. But now we             than    that.    We    offer
Caribbean.                        the quality and attitude of         which, Captain Salas argues,     particularly keen to revive          have shown them nothing            culture,       architecture,
     But     when      Captain    all the people involved.            “The Colombian economy is        cruise ship arrivals and the         of that kind is happening in       history – a very different
Alfonso Salas first went          That teamwork is what is            growing as never before,         associated benefits in terms         Cartagena. We’ve had zero          offering from most other
there with the Navy in 1957,      bringing in the results.”           the demand for its products      of tourism. “Over the winter         incidents with our cruise          destinations.”
Cartagena’s      glory     days        Nor is Captain Salas           such as coal and natural         season of 1998-99,” he               passengers for a long time             So    different,    says
seemed to have been lost          content to rest on his laurels.     gas are increasing, and          recalls, “up to 160 cruise           and last year we hosted the        Captain      Salas,    that:
forever. As a port it no longer   A new terminal is about to          the country holds strategic      ships visited Cartagena.” But        Platinum Event of the FCCA         “When passengers first
counted for much, and the         be completed, and by 2015           importance      as    a   firm   then, primarily because of           (Florida-Caribbean Cruise          arrive     in     Cartagena
city’s fabric was crumbling.      another container terminal,         ally of the United States        security scares, the numbers         Association), so they could        they do not know what
Yet, since he returned 14         CONTECARG,          will    have    in the Caribbean region          fell rapidly. Now, some of the       see for themselves that            to expect.       But when
years ago to work with the        risen alongside Cartagena           – all these point to further     major players like the Royal         everything is safe.                they leave, they often
private-sector port operator,     Bay. “Most of the major             growth. If you look at any       Caribbean,      Princess,   and          “Also, by experiencing         say they want to come
Sociedad Portuaria Regional       investment will be taking           of the indicators – macro-       Crystal cruise lines are calling     the beautiful architecture         back again because it
De Cartagena, Captain Salas       place over the next two to          economic,         performance    at Cartagena once more,              and culture in person, they        is so beautiful and they
has been responsible for          three years,” he explains,          on      security,     business   the number of vessels                soon realize that there is a       have had such a good
transforming the port from        “including the construction of      confidence – the signs           doubling every year.                 great difference between           experience.”

                                                                                                                  PORTS                     be increased to demand.            technology upgrades. “We are
                                                                                                                                                 “The main new in-             the only port in Colombia,”
                                                                                                       *PORTS, FROM FRONT PAGE
                                                                                                                                            vestments,” says Captain           says Ceballos, “with a unique
                                                                                                                                            Salas, “are going to happen        refrigeration storeroom for
                                                                                                            Nonetheless, the Co-            within the next three to           fruits and other products
                                                                                                       lombian       government        is   five years. There are huge         requiring precise temperature
                                                                                                       seeking a rapid expansion            opportunities,         whether     and environment control. In
                                                                                                       and upgrade of existing port         they be in new refineries,         fact, we are the only one on
                                                                                                       facilities in preparation for        petrochemicals,       factories,   the Pacific coast apart from
                                                                                                       the anticipated increase in          hotels, or tourist activities.”    Chile.”
                                                                                                       volumes of cargo passing                  Further along the Ca-              In order to reduce the
                                                                                                       through the country’s ports          ribbean coastline, the port        time ships need to spend in
                                                                                                       as a result of the Free Trade        of Santa Marta specializes in      port, a COSMOS system has
                                                                                                       Agreement (FTA) with the             the export of coal while that      been installed to facilitate
                                                                                                       United States.                       of Barranquilla deals mainly       logistics management and
                                                                                                            “In order to fast-track         in agricultural produce. Here      automate systems to address
                                                                                                       these improvements,” says            again, major improvements          congestion problems, while
                                                                                                       the Minister of Transportation,      are being made to the              at the same time allowing
                                                                                                       Andrés Uriel Gallego Henao,          navigability of the Magdalena      more       thorough       cargo
                                                                                                       “concessions to operate the          River, including enlarging the     inspection. On the crucial
                                                                                                       country’s five public ports          main channel by dredging           issue of port security there
                                                                                                       lasting until 2013 are being         and raising the height of          has been support from the
                                                                                                       revised, so that further             the Pumarejo Bridge so that        US embassy. A key element
                                                                                                       investments can be made.             larger ships can pass beneath      of this is CISE, a high-
                                                                                                       We are currently working             it.                                tech       security-monitoring
                                                                                                       with private-sector operators             The main port on the          network       that     protects
                                                                                                       to establish what levels of          Pacific coast is Buenaventura,     cargo and helps in the fight
                                                                                                       investment are necessary,            which handles a broad range        against      narco-trafficking.
                                                                                                       and what time extensions             of merchandise including                “We have a good budget
                                                                                                       to their grants are needed           bulk cargoes such as grain,        for     further     investment
                                                                                                       for them to recover their            oil, and other liquids. “Our       in technology this year,”
                                                                                                       investments.”                        business increased by 13 per       says Ceballos, “and will
                                                                                                            The       driving      force    cent last year,” says Nancy        be buying more cranes to
                                                                                                       behind      this     commercial      Ceballos, General Manager of       increase capacity.” But in
                                                                                                       reorganization of Colombia’s         Sociedad Portuaria Regional        Buenaventura, modernization
                                                                                                       main seaports is the urgent          de Buenaventura, the private-      and social responsibility go
                                                                                                       need to expand capacity.             sector company that manages        hand in hand. The port’s
                                                                                                       “In terms of port loading            the port’s operations. The         long history means that it
                                                                                                       we are already growing at            facility handles almost half of    is an integral part of the
                                                                                                       26 per cent,” says Henao,            Colombia’s foreign trade, and      lives of the people of the
                                                                                                       “so we need to expand our            the society is now exporting       Buenaventura peninsula, and
                                                                                                       capabilities.”                       its know-how to countries          the Sociedad claims to invest
                                                                                                            Henao       accepts     that    like Costa Rica, where it has      between 2 and 3 per cent of
                                                                                                       Colombia’s existing current          acquired the Caldera port.         its revenues in community
                                                                                                       transport infrastructure is               The port of Buenaventura      projects such as the provision
                                                                                                       likely to be stretched following     has recently invested in           of education and housing.
                                                                                                       ratification of the FTA, though
                                                                                                       he is confident that the area
                                                                                                       most easy to improve is the
                                                                                                       port services: “I believe that
                                                                                                       if the government and private
                                                                                                       sector join forces we could
                                                                                                       very quickly be prepared for
                                                                                                       the growth in international
                                                                                                            There is a sound platform
                                                                                                       on which to build, with three
                                                                                                       major ports serving the
                                                                                                       Atlantic and one on the Pacific
                                                                                                       coast. Of these, Cartagena is
                                                                                                       probably the most important,
                                                                                                       being the largest and most
                                                                                                       modern container terminal
                                                                                                       in the region. With one new
                                                                                                       terminal about to be finished
                                                                                                       and another, state-of-the-art
                                                                                                       container terminal planned for
                                                                                                       opening in 2015, the General
                                                                                                       Manager of Cartagena Port,
                                                                                                       Captain Alfonso Salas, is
                                                                                                       confident that capacity can
                                                                                                                                                                                                               Page 7

                                                                                                               Colombia to
                                                                                                               the World
                                                                                                                 There is fierce                      Móvil with around 9 per                 throughout the country.
                                                                                                               competition for this                   cent. Last year, Milicom                     Meanwhile,        Telecom
                                                                                                               market in Colombia.                    International          became           has moved beyond its old
                                                                                                                                                      the majority shareholder                monopoly of pan-national
                                                                                                                   C o l o m b i a ’ s                and strategic partner in                and international fixed line
                                                                                                               telecommunications                     Colombia Móvil, alongside               to enter the Bogotá market,
                                                                                                               industry has undergone                 minority       partners     ETB         and is currently building
                                                                                                               major     restructuring      in        and Empresas Públicas de                a broadband platform to
                                                                                                               recent years following the             Medellín.                               serve not just the capital
                                                                                                               opening of the domestic                     Orduz       thinks      the        and major cities like Cali but
                                                                                                               markets and the entry                  number of subscribers will              more than 37 municipalities
                                                                                                               of    global   players     like        continue growing through to             across the country.
                                                                                                               Telefónica    and     Milicom          2008. However, competition                   Penetration of broad-
                                                                                                               International into the arena           for new subscribers is so               band     Internet     is    still
                                                                                                               – though to date these                 intense that sophisticated              comparatively low, but it is
                                                                                                               multinationals have been               handsets are made available             rising fast. Orduz estimates
                                                                                                               involved mainly through                at heavily subsidized prices            the      total      Colombian
                                                                                                               joint ventures with leading            just weeks after they are               market at 400,000 users,
                                                                                                               Colombian           operators          released in the United                  adding, “This is not a
                                                                                                               such as ETB (Empresa de                States.      And     now     the        lot, and the success of
                                                                                                               Telecomunicaciones           de        competition is moving on                new IP products depends
                                                                                                               Bogotá) and Telecom.                   to VOIP (Voice Over IP) and             very much on achiev-
                                                                                                                   However,         despite           other products are coming               ing    higher    penetration.”
                                                                                                               the relatively recent li-              online.                                      ETB has a program for
                                                                                                               beralization, the mobile                    It is remarkable how               extending Internet access
                                                                                                               telephony market is already            the old monopoly-holders                to some of the poorest
                                                                                                               close to saturation point              are adapting to this new                neighborhoods in Bogotá
                                                                                                               in the main population                 environment.         ETB used           through local centers with
                                                                                                               centers. Official figures for          to have the monopoly                    20-30 computers, each with
                                                                                                               cellphone use suggest there            of     fixed-line     telephony         links into schools so that
                                                                                                               are 29 million subscribers,            within the Bogotá region;               students can use them. But
                                                                                                               though as Rafael Orduz,                it still holds pole position            already things are moving
                                                                                                               president of ETB, points               in the capital and has                  beyond broadband with the
                                                                                                               out, “The actual market size           introduced the lowest flat              big Colombian operators
                                                                                                               is nearer 21 million because           fees for unlimited use in               assessing     new     formats,
                                                                                                               the principal format is pre-           the      Colombian      market.         such as WiMAX, which are
                                                                                                               paid and a lot of people                    Nowadays         ETB      is       expected to replace it.
                                                                                                               do not recharge their                  also competing long dis-                     “What is going to
                                                                                                               cards for months on end.”              tance      and    offers    pre-        happen next in Colombia
                                                                                                                   There is fierce com-               paid cards in the United                is what’s happening right
                                                                                                               petition for this market               States, Panama and Spain                now     in   Europe,”      says
                                                                                                               between the three big                  targeted at Colombians                  Orduz,     “namely       fixed-
                                                                                                               players:     Comcel       with         living abroad. But it has               mobile         convergence.
                                                                                                               around 65 per cent share,              also developed a complete               ETB and its partners in
                                                                                                               Movistar (involving Spain’s            range of services beyond                Colombia Móvil all have
                                                                                                               Telefónica and Colombia                its     fixed-line     heritage,        fixed-line    capability,    so
                                                                                                               Telecomunicaciones)       with         becoming the leading ISP                convergence       should     be
                                                                                                               26 per cent, and Colombia              (Internet Service Provider)             possible within two years.”

An Abundance of Natural Resources
  Colombia is blessed with a              For one thing, the state-      would lose its self-sufficiency in    León Teicher, describes as “the        of our exports will be to the US over   ensure that all newly imported
variety of natural resources.        owned Ecopetrol, which used         energy by 2008. But by bringing       world’s largest pit-coal mine          the next five years.”                   cars can run on 20 per cent
     When      Colombia’s      own   to take a 50 per cent cut of        international investors back          devoted to exports. About 60 per             Natural gas is growing            bio-diesel or alcohol-based mix
Minister of Mines and Energy,        other companies’ oil discoveries,   and licensing more exploration        cent of our coal goes to Europe,       fast in Colombia, with domestic         by 2012. There is also a pilot
Hernán Martínez Torres, describes    is no longer a partner in the       blocks, Colombia has earned a         mostly to Western Europe, some         demand booming and exports              wind farm in La Guajira where,
his country as a “hidden gem for     new-style      E&P     contracts,   reprieve until 2011. Both the         to the Mediterranean and the rest      to its neighboring Venezuela to         according to World Bank studies,
foreign investors,” eyebrows might   responsibility   having     been    Energy Minister and President         to the US and Central and South        be carried down a new pipeline          there is potential for generating
be raised among hard-bitten          transferred to the Agencia          are confident that more is yet        America.”                              currently under construction. The       20,000 MW, and plans are for
oilmen and other skeptics. But       Nacional de Hidrocarburos. More     to come. According to some                 Cerrejón also runs its            electricity industry is consolidating   alternative energy to supply
much has changed in Colombia,        favorable terms have brought the    estimates, the Tayrona field in       own railroad and port, thereby         fast, with players like EEB (Empresa    between 2.5 and 3 per cent of
both in the internal security        international companies back.       the north alone has the potential     providing very high reliability for    de Energía de Bogotá) now active        total demand.
situation and the availability of    “This is why we will be drilling    to reverse Colombia’s loss of self-   its customers who are mainly           not only in power generation,                But despite these moves
stable, long-term exploration and    50 new wells this year,” says       sufficiency in petroleum.             electricity generators in North        transmission, and local distribution,   towards     alternative     energy
production (E&P) contracts. So       Torres, adding that “contractual         Colombia is blessed with a       America and Europe. “Last year,        but also in natural gas.                sources, “dependency on pe-
much so that William Drennan of      terms will not change because       variety of natural resources and      we exported 27.5 million tonnes,             Away from the traditional         troleum is still very high,” says
ExxonMobil was recently quoted       we need further investment and      is also a major coal producer.        or nearly 10 per cent of the entire    energy industries, Colombia is          Torres, “which is why further
as saying that “Colombia now         exploration.”                       Carbones del Cerrejón is a            Atlantic coal market,” says Teicher.   also moving towards developing          investment in both hydrocarbon
offers among the best fiscal terms        That need was fueled by        major force in the local market       “Our exports to the US are growing     alternative fuels like ethanol          exploration     and     alternative
in the world.”                       the expectation that Colombia       operating what its president,         and I expect about 30-40 per cent      and bio-diesel, the plan being to       energies is essential.”
    Page 8

Atlántico, a Great Exporting Platform in
the Caribbean Region
                                                                    geographic location pro-         weighing one kilogram            significant tax benefits         electricity, natural gas
                                                                    vides easy access to             carried from the port            for companies exceed-            and telecommunications
                                                                    markets such as Europe,          of Shanghai to Miami             ing US$30 million or             (it is the main cen-
                                                                    Southern, Central, and           costs US$2.99, carrying          creating at least 600 job        ter    for   optical    fiber
                                                                    North America, and also          it     from      Barranqui-      opportunities.                   telecommunications).
                                                                    Colombia’s          domestic     lla,    Colombia,        costs       Atlántico offers as          As for education, in
                                                                    market, turning Atlántico        US$0.84. And shipping            an exclusive advantage           Atlántico there are 26
                                                                    into    the     best    trade    it by sea is even more           a 100-kilometer bank             universities, both public
                                                                    corner      of     Colombia.     convenient:        shipping      near the mouth of the            and private.
                                                                    Atlántico      is   naturally    a 1 kg package from              Magdalena River. Between              Also in the area’s
                                                                    and strongly inclined to         Shanghai to the US costs         the    municipalities    of      favor is the fact that
                                                                    exports, supported by            US$0.31, while shipping          Malambo and Sabana               it is free from the
                                                                    a logistics and services         it    from     Barranquilla      Grande, 1,400 hectares           hurricanes that strongly
                                                                    infrastructure.                  costs US$0.01. Moreover,         have been assigned to            affect    certain    regions
                                                                         The proper location         delivery          deadlines      industrial development,          of Central America and
                                                                    of    products      for   ex-    for freights from the            with     significant    tax      the Caribbean, and has
                                                                    port,      logistics,     and    department      of     Atlán-    incentives.     This   area      the greatest earthquake
                                                                    freight charges are de-          tico    are   substantially      is   ideal    for    export      stability      in      Latin
                                                                    termining       factors    for   reduced from 28 days             production: located on           America.
                                                                    competitiveness,         even    to 3.5 days, favoring            the banks of the river,               Due to the current
                                                                    more relevant for export         competitiveness.                 30 kilometers away from          location, land availabi-
                                                                    success than the duties               Barranquilla     is   an    the sea, with land for           lity, water, goods and
                                                                    themselves. That is the          industrial, harbor, and          sale by the hectare at           services    infrastructure,
                                                                    reason why coastal areas         special     district.     The    low prices.                      and ability to change,
                                                                    are particularly appealing       port    is   managed       by        In two months’ time,         Atlántico is the ideal
                                                                    to    exporters.       China,    the Sociedad Portuaria           the building process for         place for agricultural and
                                                                    an obvious country to
                                                                    mention with regard to
                                                                    foreign exports, performs
                                                                                                      “The port will include a multipurpose quay, as
                                                                    80 per cent of its export
                                                                    activity in six coastal
                                                                                                     well as industrial and manufacturing areas. There
                                                                    provinces: Guangdong,
                                                                    Jiangsu,          Shanghai,
                                                                                                          will be another four new ports nearby.”
LOCATION: Map of Atlántico, Colombia.                               Zheijiang,        Shandong,
                                                                    and     Fujian.     The    US    Regional de Barranquilla         the International Duty-          livestock activities and/or
  Due to the current location, land availability,                   market is particularly           (SPRB) and a significant         Free Zone in Atlántico           agribusiness, particularly
water, goods and services infrastructure, and                       significant since in 2005        number of foreign trade          will begin along the             fruit, vegetables, root
ability to change, Atlántico is the ideal place for                 imports      amounted       to   operations are performed         whole      120      hectares     vegetables, meat, dairy
agricultural and livestock activities.                              US$1,900 trillion.               within    the    premises.       located     2     kilometers     products,      aquiculture,
                                                                         As for China, Atlántico     Many industries grow             from         Barranquilla’s      and fishing. The de-
    Bordering the Atlan-          Colombia, the Atlántico           offers great advantages          between the mouth of the         beltway, near the port           partment       has       been
tic Ocean and located             Department acts as a              in freight charges so as to      Magdalena River and the          infrastructure.         Such     certified by international
at the mouth of the               seaport as well as a river        gain access to the North         freight terminal. Atlántico      location allows an easy          agencies as a region free
Magdalena     River, the          port, an airport, and a           American market. While           displays     a     continu-      land communication with          from       foot-and-mouth
most     significant  in          teleport. The privileged          an average air freight           ous port development,            the Caribbean Region             disease and the premises
                                                                                                     as evidenced by the              and other departments            of the most important
                                                                                                     deepwater port that will         in the country. Special          meat-processing plant in

Geography is our Strength:
                                                                                                     be located at the end            laws covering promotion          the country are located
                                                                                                     of the left bank of the          of    international     trade    within its region, half
                                                                                                     Magdalena River, where it        are in force and 25,000          an hour away from the

Governor Carlos Rodado Noriega
                                                                                                     flows into the Caribbean         job     opportunities     will   port. The stockbreeding
                                                                                                     Sea. The port will include       be offered. Moreover,            industry is prepared to
                                                                                                     a multipurpose quay, as          five industrial parks are        take advantage of the
                                                                                                     well as industrial and           being developed.                 Free Trade Agreement
    An interview with the                                                                            manufacturing         areas.          Among       the    most     (FTA) with the United
Governor of Atlántico,                                                                               There will be another            dynamic           production     States.     Through        the
Carlos Rodado Noriega.                                                                               four new ports nearby.           sectors in the department        wood-processing plants
     Q: Governor, why do                                                                                 The Duty-Free Zone           are      beverages        and    and with more than
you think Atlántico is a                                                                             in Barranquilla is an            tobacco, garment and             30    years’     experience
good choice for capital                                                                              industrial park located          footwear,      wood       and    of      sowing        timber
investment?                                                                                          in an excellent position.        paper, chemicals, goods          products, progress can
     Carlos Rodado Noriega:                                                                          Developed next to the            for     construction,      ca-   be seen towards the
Geography is our biggest                                                                             Sociedad          Portuaria      pital    goods,     carriage,    establishment         of     a
strength. Being located on                                                                           Regional de Barranquilla         and craftwork. Service           15,000-hectare         forest
the furthest northeast point                                                                         in a one million square          groups      include      tele-   center during the next
of the Caribbean coast of                                                                            meter     area    for    the     communications, health,          five years.
Colombia grants Atlántico                                                                            purpose of establishing          tourism, carriage and                With the sea and
a strategic and privileged                                                                           industrial,    trade,     or     logistics, financial ser-        20,000 hectares of river,
position, very close to                                                                              services        companies,       vices, as well as services       lakes, water reserves,
the busiest trade routes                                                                             this zone is naturally           for     construction      and    and the first station for
worldwide. Atlántico is the                                                                          inclined to exports and          public works. 10 per             fish-farming research in
region in Southern America                                                                           therefore is ruled by            cent of the country’s            the country, Atlántico
closest to the US market,                                                                            special customs, foreign         manufactured goods are           is destined to become
besides its direct access to                                                                         exchange, and tax laws.          produced      in    Atlántico    one of the most impor-
Europe and the Caribbean                                                                             Another          successful      – that is 50 per cent of         tant    growers/exporters
Region. A key aspect shall                                                                           industrial    development        all manufactured goods           of aquiculture products
be to turn a 100-kilometer                                                                           in    Atlántico    is    the     from      the     Caribbean      within the region. The
area all along the banks                                                                             Parque     Industrial     de     Region.                          outlook is also good
of the Magdalena River                                                                               Malambo S.A. (PIMSA),                 Atlántico         offers    for    the    tilapia     and
into an industrial corridor                                                                          which has a port 56              the appropriate infra-           shrimp industries due
for those products to                                                                                feet deep. In order to           structure        for       the   to    the     performance,
be exported. That area                                                                               reactivate    the     export     provision of public service      t r a n s p o r t a t i o n ,
includes Barranquilla and                                                                            sectors, national policies       utilities: potable water         possibilities     for     new
ten additional municipalities                                                                        set forth legal rules            in urban areas, water            areas of water surface to
in the eastern area of                                                                               encouraging investment,          for economic develop-            be added and adequate
Atlántico and borders the                                                                            such as acknowledging            ment in the country,             phytosanitary measures.
Caribbean Sea and the
Magdalena River.
     Q:      The      main       POSITIVE: Governor of Atlántico, Carlos Rodado Noriega
characteristic     of    the
Caribbean      Region      is         Q: What kinds of           appealing aspects for investors
tourism. What are the           measures        have     been    in the region is the FTA.
main tourism features in        taken in advance?                Barranquilla is greatly focused
Atlántico?                            C.R.N.: We traveled        towards exports. Since it is a
     C.R.N.:    There    are    to     China    because    we    department naturally inclined
beautiful beaches all along     believe that companies in        towards exports, Atlántico
90 kilometers by the            that country may obtain          has skilled human resources.
Caribbean Sea, good resorts     advantages by establishing       We invest in education,
that are being turned into      here in order to manufacture     granting a major significance
very interesting tourism        and export to the US, since      to computing science and the
centers. Another feature is     it is less expensive to export   English language. The best
business tourism, attracting    from here than doing it          way to compete with Asia is
millions    of   executives.    from China. We offer legal       innovation. The international
Some companies in the           security, stable rules for       competitors in a globalized
private sector such as the      investment and specific          market are tough and being
Chamber of Commerce,            rules applicable in duty-free    successful in such a tough
Pro-Barranquilla, and the       zones, tax incentives and a      struggle is equal to winning a
Comité Intergremial del         privileged location.             gold medal in the Trade World
Atlántico work together               Q: How is Atlántico        Olympics.
for the creation of new         going to face the FTA?
business opportunities.               C.R.N.: One of the most                FASTER: Route between Barranquilla and Shanghai, China.

            Procaps Tel: 3530783                                                                                                                    Zona Franca Tel: 3448642-3448429
  Calle 80 No.78B-201 Barranquilla, Atlántico                                                                                                  Ave. Hamburgo carrera 30 Barranquilla, Atlántico

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